Which of the Following Would Be an Argument for Using

question 122

Multiple Choice

Which of the following would be an argument for using the gross cost of plant and equipment as part of operating assets in return on investment computations?

• A) It is consistent with the computation of net operating income, which includes depreciation as an operating expense.
• B) It is consistent with the balance sheet presentation of plant and equipment.
• C) It eliminates the age of equipment as a factor in ROI computations.
• D) It discourages the replacement of old, worn-out equipment because of the dramatic, adverse effect on ROI.

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Definitions:

Terminal Moraine

A terminal moraine is an accumulation of debris and sediment formed at the snout (end point) of a glacier, marking the furthest advance of the glacier.

Cirque

A mountain basin with steep sides and a bowl-like shape, formed by glacier activity, frequently hosting a small lake.

Moraine

A mass of rocks and sediment carried down and deposited by a glacier, typically as ridges at its edges or extremity.

Valley

A low area between hills or mountains, often with a river or stream flowing through it.